International airfares lose altitude as capacity and competition take off

New data from Flight Centre’s flagship corporate divisions, FCM Travel and Corporate Traveller, has revealed new data about the average international outbound Economy airfares across all carriers in 2023. Fares universally decreased 12.9% in the second half of 2023, compared to the same period in 2022, equating to an average saving of $280 per ticket. Flight Centre Corporate reported that all cabin classes followed suit, with Business Class fares decreasing by 7.99% – or down by $834 – and First Class fares dropping by 8.02% (a saving of $1,282) during the same period. On the findings, Flight Centre Corporate MD for ANZ/Global FCM COO Melissa Elf says: “We’ve spent some time now assuring our corporate travellers that as airlines continue to recover, as capacity and competition comes back to the network, our travellers would start to see the cost of travel drop.” “We’re starting to see the signs of exactly that – and although we’ve still got some way to go yet in terms of getting back to full capacity, particularly internationally, there’s no doubt we’re beginning to feel the positive effects.” Flight Centre Corporate additionally analysed the fare prices on key routes. It found Economy flights into Hong Kong from Australia recorded the highest rates of relief, at -35.75% This was followed by New Zealand (-23.57%), Singapore (-15.65%), and the United States (-16.06%). Hong Kong also saw Business Class fare drops at -23.83%, due to the removal of quarantine requirements for international entrants in September 2022. The United States followed this with a -11.07% drop in Business Class airfares, Canada at -10.58%, and Germany at -8.67%. First Class fares in the United States of America showed the greatest drop with the average fare down by -14.8% Elf continued: “There’s more room for prices to drop to destinations like the Middle East, New Zealand, and North America, for example, which are at pre-2019 capacity levels of 81%, 86% and 91% respectively. “There’s still restricted capacity on European flights and that’s the last frontier we need to conquer for customers to feel relief on routes to the likes of the United Kingdom, France, and Italy – this is evidenced by softer airfare decreases to these destinations. “With demand into Europe high, it’s critical more flights and competition are added, with the recent announcement like the granting of slots to Turkish Airlines being exactly what the industry needs for prices to drop even further.”